What's Happening?
The Jordan Chamber of Industry (JCI), led by Chairman Fathi Jaghbir, has identified the supply of natural gas to factories as a pivotal component of the country's Economic Modernization Vision. This initiative is part of the second executive program aimed
at enhancing the competitiveness and sustainable growth of Jordanian industries. The project is expected to provide a more efficient and cost-effective energy alternative compared to traditional fuels like diesel and heavy fuel oil. This shift is anticipated to reduce production costs and increase the competitiveness of factories, particularly in the industrial hubs of Amman and Zarqa, which house about 60% of the nation's industrial establishments. The availability of natural gas is also seen as a crucial factor for attracting future industrial investments, especially in energy-intensive sectors such as chemicals, petrochemicals, and food processing.
Why It's Important?
The transition to natural gas is significant for Jordan's industrial sector as it promises substantial energy cost savings, estimated between 35% to 50%, depending on the industry and fuel type. This cost reduction is crucial for improving the competitiveness of Jordanian industries, where energy expenses can constitute up to 40% of total production costs. By lowering these costs, Jordanian factories can enhance their profitability, close the production cost gap with regional competitors, and improve product quality. Additionally, the project aligns with Jordan's national goals of reducing carbon emissions and promoting a green economy, thereby enhancing compliance with international environmental standards and attracting modern industrial investments.
What's Next?
The successful implementation of the natural gas supply project is expected to continue improving Jordan's investment climate and industrial competitiveness. As more factories transition to natural gas, the country could see increased foreign investment in its industrial sector. The project also supports Jordan's commitment to international environmental agreements, potentially leading to further policy developments aimed at sustainability. The ongoing shift may encourage other sectors to adopt similar energy-efficient practices, contributing to broader economic modernization and environmental goals.
